The owner of a chain of Atlanta-area medical clinics has been sentenced to 36 months in federal prison for a scheme in which former state insurance commissioner John Oxendine also has been indicted.
Alpharetta-based physician Jeffrey Gallups had ordered doctors who worked at his Ear, Nose & Throat Institute clinics to require unnecessary lab tests for patients. All the while, he had a secret arrangement with a Texas lab company to split the money generated by the tests, prosecutors said.
The scheme stuck patients with lab bills for thousands of dollars and defrauded insurance companies. Gallups pleaded guilty in October to submitting fraudulent insurance claims, and last week, as part of his sentence, he was ordered to pay more than $700,000 in restitution. He also was fined $25,000.
In a separate civil case, Gallups and his company, Milton Hall Surgical Associates, in December agreed to pay about $3 million to settle a federal whistleblower lawsuit alleging the scheme bilked government health care programs.
A May indictment against Oxendine alleges that he was a middleman in the scheme.
According to federal prosecutors, the lab company paid kickbacks to Gallups through the former insurance commissioner, who also took a cut of the proceeds. Prosecutors also accuse Oxendine of helping to pressure doctors in Gallups’ clinics to order the tests.
Gallups had told the doctors to order toxicology and genetic screens for every patient 12 and older who was going to have...
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